PwC reaffirms the role of emerging markets in driving global economic growth
PwC’s Growth Markets Centre has recently launched its 2017 annual report titled ‘Winning in maturing markets’, which focuses on reaffirming the role of emerging markets in an era marked by sluggish global growth and rising economic and political uncertainties across many parts of the globe. The report also discusses the growth prospects for sectors such as agriculture, the social sector, manufacturing, retail, financial services and connectivity.
Growth markets are not necessarily ‘volatile’ and should be considered as ‘maturing’ in nature, with different markets following distinctive growth paths towards stability and long-term prosperity. Despite recent stagnation in the pace of GDP growth as a result of domestic and external factors – including local and foreign policy actions, falling global commodity prices, speculation around rising interest rates and unfortunate environment disasters – growth markets will continue to register a rising share in global GDP growth in the next five years, reaching almost 65 percent by 2021.
Economies in the Middle East have also been impacted by global reduction in oil prices and Gulf Cooperation Council (GCC) countries like Saudi Arabia and United Arab Emirates have seen a signification drop in GDP growth in 2016. In 2017, they are expected to recover in 2017 due to an increase in oil prices and an increasing focus on economic diversification.
Manufacturing is a major provider of productive employment and a significant growth driver in the early stages of an economy, and helps in further stimulating innovation in the longer term. Today’s growth markets are moving through their manufacturing evolutionary journey at different speeds, and to capitalise on the wide array of growth opportunities, organisations need to better understand the global shifts governing the market and operational landscape in the manufacturing sector.
Growth markets are now responsible for almost 60 percent of all low and medium technology manufacturing worldwide. The markets have grown their share in high-tech manufacturing, accounting for almost 50 percent of manufacturing value-add globally.
Dr. Anil Khurana, Partner, Strategy & Innovation at PwC Middle East, said:
“Manufacturing is seeing a global revival and redesign in many ways. After decades of facing pressures from low cost labour models, China effect, automation, and environmental issues, rapid changes in technology and global models promise an exciting era. Several mega trends and disruptions, including the 4th industrial revolution, promise radical changes in competition, economics, and industry landscapes - indeed a call to action for companies, countries, governments, jobs, and consumers. Investors, executives, entrepreneurs, policy makers.”